Why the decline

When the rupiah fell below the 77 level after the Russian-Ukrainian war escalated and crude oil prices spiked, the Reserve Bank of India (RBI) sold dollars to prevent a fall in the value of the rupee. The RBI intervention – dollar sales via PSU banks – began when the rupiah broke through the 76 level and headed towards 77 against the dollar.

The RBI sold $5.135 billion to the banks on March 8 and simultaneously agreed to buy back the dollars at the end of the swap settlement period. When the central bank sells dollars, it sucks up an equivalent amount in rupees, thereby reducing rupee liquidity in the system. The influx of dollars in the market strengthened the rupiah which reached the level of 77 against the dollar on March 8th. On March 17, the rupee jumped 41 paise to close at 75.80/81 against the dollar.

Pressure on the rupee

Putting heavy pressure on the rupee, foreign investors have withdrawn Rs 41,617 crore so far in March. The outflow came after withdrawals of Rs 45,720 crore in February and Rs 41,346 crore in January. With this, REITs have withdrawn Rs 2,25,649 crore (excluding REIT investments in IPOs) since October 1, 2021, mainly anticipating an interest rate hike by the US Federal Reserve.

Additionally, Brent prices soared to a nearly 14-year high of $140 as the war in Ukraine escalated. As India imports nearly 80% of its domestic oil requirements, high crude prices would have led to a sharp increase in dollar requirements.

Sharp drop in FCA

The main components of foreign exchange reserves are foreign currency assets (FCA), gold assets and IMF SDRs (special drawing rights). The RBI sold dollars from its FCA kitty – kept in global central banks, foreign banks and foreign securities – to bolster the rupiah.

According to central bank data, FCA plunged $11.108 billion to $554.359 billion in the week ended March 11. The FCA includes the effect of the appreciation or depreciation of the dollar and non-US units such as the euro, the pound and the yen held in foreign exchange reserves.

However, with the surge in gold prices in the context of the Russian-Ukrainian war, the value of gold reserves increased by $1.522 billion to $43.842 billion during the reference week.

For the week ended, the country’s foreign exchange reserves decreased by $9.646 billion to $622.275 billion. Reserves had increased by $394 million to $631.92 billion in the prior week ended March 4. They reached a lifetime high of $642.453 billion during the week ended September 3, 2021.

RIYADH: Central banks in the Gulf and the UK raised interest rates, while economic growth in New Zealand resurfaced. The United States has seen changing levels of unemployment.

Gulf Interest Rates

Gulf central banks on Wednesday raised key interest rates by a quarter of a percentage point in line with the US Federal Reserve as it entered a cycle of monetary tightening in a new aggressive stance against rising inflation .

The six Arab countries of the Gulf Cooperation Council generally follow the Fed’s lead on interest rates, as their currencies are pegged to the US dollar, with the exception of Kuwait, which is pegged to a basket of currencies including the dollar.

“If Gulf policymakers did not allow interest rates to follow those of the United States, capital would flow out of their economies and this would put downward pressure on their currencies,” wrote James Swanston, economist for the Middle East and North Africa at Capital Economics. in a research note.

The Saudi Central Bank – also known as SAMA – raised its repo and reverse repo rates by 25 basis points each to 1.25% and 0.75%, respectively.

“The policy rate adjustments are consistent with SAMA’s objectives of maintaining monetary stability and supporting financial sector stability amid changing domestic and international monetary conditions,” the Central Bank of Saudi Arabia said in a statement.

The Central Bank of the United Arab Emirates raised its base rate, which applies to its overnight deposit facility, by 25 basis points to 0.4%. The CBUAE maintained the rate of borrowing short-term cash from it through all standing credit facilities at 50 basis points above the base rate.

UK interest rates

The Bank of England raised interest rates on Thursday in a bid to prevent rapid inflation from taking hold, but with households hit hard by soaring energy bills, it softened its language on the need for further increases.

Eight of the nine members of the Monetary Policy Committee voted to raise the Bank Rate to 0.75% from 0.5%, their third hike in as many meetings and returning rates to pre-pandemic levels.

The BoE said inflation is expected to hit around 8% in April – almost a percentage point higher than expected last month and four times its 2% target – and warned it could peak even later. during this year.

Soaring energy bills, even higher due to the conflict in Ukraine, means the squeeze on UK household budgets is likely to be much bigger than what the BoE predicted last month – which itself was expected to be the biggest. for 30 years.

Reflecting those concerns about the growth outlook, policymakers on Thursday pushed back on investors’ bets that the bank rate would rise sharply to around 2% by the end of this year, toning down its language on the need for further hikes. .

“The Committee judged that further modest tightening may be appropriate in the coming months, but there were risks on both sides of that judgment depending on how the medium-term outlook changes,” the BoE said.

Last month, the MPC said further modest tightening “is likely to be appropriate.”

Unemployment in the United States rolls

Last week’s claims data covered the period the government surveyed business establishments for the non-farm payrolls component of the March jobs report. Claims dropped significantly between the February and March survey periods.

The economy created 678,000 jobs in February. Employment growth was helped by the return of some workers to the labor market amid a significant drop in COVID-19 infections.

The claims report also showed the number of people receiving benefits after an initial week of help fell by 71,000 to 1.419 million in the week ended March 5. This was the lowest level for these so-called continuing claims since February 1970.

While permits for future home construction fell 1.9% to a rate of 1.859 million units, they weren’t too far off the nearly 16-year high reached in January. This suggests that an acute housing shortage will continue to support residential construction even if mortgage rates rise.

New Zealand GDP

New Zealand’s gross domestic product returned to growth in the final quarter of 2021 as the economy emerged from COVID-19 lockdowns, and economists said the data confirmed expectations that the central bank would expand further interest rates.

Production based on output rose 3.0% in the quarter, Stats NZ reported on Thursday. That was slightly below economists’ median expectations of a 3.2% rise and a sharp turnaround from a revised 3.6% drop in the September quarter, when shutdowns dampened the activity.

The Reserve Bank of New Zealand last month forecast growth of 2.3% for the December quarter.

“The fourth quarter GDP data reflects a robust, albeit very stimulated, economy,” ANZ economists said in a report.

Although there were a number of uncertainties over the outlook, the main concern was rising inflation in New Zealand which would force the RBNZ to tighten policy further, they added.

Annual GDP rose 3.1%, slightly below a Reuters poll forecast for a 3.3% rise.

The RBNZ has already raised interest rates three times since October.

“Given that the rebound in activity in the fourth quarter exceeded RBNZ expectations, today’s data will keep the Bank on its way,” Ben Udy, an economist at Capital Economics, said in a statement. a rating.

Defense Minister Rajnath Singh, External Affairs Minister S Jaishankar and Finance Minister Nirmala Sitharaman were among those who attended the meeting.

In the days following the start of the war on February 24, the majority of Indian diplomats left the Ukrainian capital of Kiev for Lviv, a city located a short distance from the Ukrainian-Polish border. But the Indian embassy in Kyiv remained functional, with a few officials stationed to coordinate with the Ukrainian authorities the evacuation of Indians from the country.

But with Russian attacks moving west into Ukraine – including a early Sunday airstrike on a military airbase near Lviv which killed 35 people – the Indian government has now decided to move its base from there to Poland.

In a statement issued on Sunday, the Foreign Ministry said: “In view of the rapidly deteriorating security situation in Ukraine, including attacks in the west of the country, it has been decided that the Embassy of India in Ukraine will be temporarily transferred to Poland.” The situation will be reassessed in light of developments, he added.

It is learned that the recent incident of an Indian cruise missile accidentally landing in Pakistan was also discussed at the SCC meeting.

Officials who were part of the meeting included National Security Advisor Ajit Doval, Cabinet Secretary Rajiv Gauba, Principal Secretary to Prime Minister PK Mishra, Defense Secretary Ajay Kumar and Foreign Secretary Harsh Vardhan Shringla .

The Prime Minister’s Office said in a statement that the SCC meeting was aimed at “reviewing India’s security preparedness and the prevailing global scenario in the context of the ongoing conflict in Ukraine”.

The Prime Minister “was briefed on the latest developments and various aspects of India’s security preparedness in the border areas as well as in the maritime and air domain”. This language also indicated that the issue of the accidental landing of the Indian missile in Pakistan was also discussed.

He said Modi was “also briefed on the latest developments in Ukraine, including details of Operation Ganga to evacuate Indian nationals, as well as some citizens of India’s neighboring countries, from Ukraine.” The Prime Minister ordered that “all possible efforts be made to bring back the mortal remains of Naveen Shekharappa, who died in Kharkiv”.

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Shekharappa, a 21-year-old medical student, was killed in the early days of the war after going out to buy supplies, but was caught in the shelling.

Since Russia invaded Ukraine on February 24, India’s main concern has been to evacuate the more than 22,000 Indian nationals, mostly students, who were stranded in various cities across Ukraine.

However, another concern within the establishment is the supply of weapon systems and spare parts for Indian weapons as a large proportion of them are of Soviet or Russian origin. A week ago, Defense Minister Singh met with the three service chiefs to review the situation, vis-à-vis pending Russian arms imports, delivery and stockpiles of replacement and maintenance of existing weapons of Russian origin.

As defense establishment officials have assured the armed forces have had spare parts for more than six months, with several countries imposing sanctions on Russia, fear is that it will become more difficult for India to ensure a regular supply of spare parts.

From fighter jets, tanks and submarines to air defense systems, frigates and guns, more than 60% of the weapons available to the Indian armed forces are of Russian origin. Many weapons also have Ukrainian components, including missiles and gas turbines for warships.

India has already signed deals worth more than US$12 billion with Russia for the delivery of major weapons in the coming years. In the short term, the Indian and Russian sides have assured that the delivery of four of the five S400 Triumf air defense units that India purchased in 2018 will continue as planned. There might be some delay, but that too is unlikely.

Apart from this, India is awaiting delivery of two Talwar class frigates from Russia, for which Ukraine had supplied the gas turbines. Ukraine was also supposed to supply gas turbines for two other frigates of this type, which will however be built in India.

India is also taking two nuclear ballistic submarines on lease from Russia – Chakra 3 and Chakra 4 – the first of which is expected to arrive in 2025.

All these projects could be jeopardized under the threat of sanctions. Although the United States has been lenient with India in imposing sanctions under its 2017 Countering America’s Adversaries Through Sanctions Act (CAATSA), but in the changing global situation, there are fears that the United States United are not so tolerant while India continues to buy sophisticated weapons products from Russia.

As India tries to expand its base for arms purchases, Russia has for decades been India’s largest defense exporter, and India has bought arms from it for over $35 billion. dollars over the past 20 years.

While most members of India’s defense establishment have no doubts about Russia’s ability to deliver the weapons or supply spare parts, how to pay them around global sanctions will be tricky. As the West tries to isolate Russia, cutting it off from the global SWIFT system, and most Western banks are closing their operations in Russia, the Reserve Bank of India has asked Indian banks to explore other avenues to make payments to Russia.

However, officials within the defense establishment argue that it is still too early to say what kinds of problems Indian forces may face in the long term as a result of the conflict and sanctions. But the situation has once again highlighted India’s dependence on Russia for its weapons.

The Reserve Bank of India (RBI) will assess inflation in detail in the next monetary policy statement in April, after recent geopolitical tensions posed an upside risk to previous projections, Deputy Governor Michael said on Friday. Debabrata Patra.

He added, however, that monetary policy’s emphasis on price stability and government responses to control prices will get India out of trouble.

In his keynote on “Taper 2022: Touchdown in Turbulence”, Patra said India’s growth is likely to remain weak, as it did during the 2013 crisis, and the recovery is likely to be affected. due to tensions between Russia and Ukraine. Patra said geopolitical tensions could cause the RBI to revise its growth projection in the April policy. The central bank had forecast India’s economy to grow by 7.8% in 2022-23. The third wave of the pandemic had a relatively minor impact as evidenced by high frequency indicators. GDP is expected to grow only 1.8% from pre-pandemic levels, Patra said.

The deputy governor said the era of abundant liquidity was coming to an end, as the world’s central banks sought to shift gears and become bond sellers rather than buyers. The timing of this coordinated central bank balance sheet reduction could not have come at a worse time, as oil prices hit decade highs, he said. While India will not remain unscathed from the turmoil about to be unleashed by some central banks, India’s external sector is better off than it was in 2013, Patra said.

He raised a question that is at the heart of the market’s mind: will central banks shrink enough to control inflation or will they be excessive enough to stifle the global recovery? Patra said multilateral organizations in their baseline scenarios expect global gross domestic product (GDP) to decline by up to 2 percentage points in this year and next. Private sector estimates suggest that if crude oil hits $150 a barrel, it will drop 1.6% of global GDP while raising global inflation by 2%.

“The hawkish tones of systemically important political pivots in early 2022 confirmed financial markets’ worst fears – the era of abundant liquidity is coming to an end. Financial assets, which have been backed by liquidity in valuations strained, are being reassessed,” Patra said.

Although monetary policy always has a national orientation, he explained, its effects tend to ripple through emerging economies and then trickle down to systemically important economies. “It is always easier to enter a dwelling than to leave it.” Highlighting the outcome of the infamous 2013 taper tantrum and its effect on India, which joined the five fragile economies after its currency was minted, Patra argued that India’s external sector will have to bear the brunt of the global fallout.

Even though India’s situation is similar to what it was in 2013, the external sector is still more viable. says Patra. “In 2022, India faces similar risks to 2013 due to soaring international crude prices and the volume of gold imports. Yet the external sector is much more viable than it appears. t was in 2013. Even with strong import demand thanks to a recovering economy and average international crude prices currently above $100 a barrel, the current account deficit is expected to remain below 2.5 percent of the GDP, having averaged 1.1% of GDP during 2014-21 India now has more stable foreign direct inflows in 2022 compared to volatile portfolio inflows that left the country in 2013. “The biggest buffer India has today is its foreign exchange reserves. No country can be immune to the global fallout that a tightening of this magnitude could bring, but a strong external sector can cushion those shocks,” did he declare.

Patra contrasted the current situation with that of 2013 to explain how central bank balance sheets have widened since then over the past two years. This is the biggest difference between yesterday and today. “Before tapering began in 2014, the Fed had expanded its balance sheet by about $3.1 trillion over a 64-month period. In response to the pandemic, the Fed’s balance sheet grew by $3.1 trillion. dollars in the nine months from March to November 2020. It grew by another $1.3 trillion in the 11 months that followed through October 2021 and continued to grow through early March.

Markets reacted to the missile launches in Ukraine, but these externalities have already been seen. Patra, however, warned that there are spinoffs that haven’t been seen before. As commodity prices soar in the aftermath of the war, inflation could undermine household spending and the risk of a global recession could intensify.

In recent years, an association inextricably linked to the Indian banking system is that of an entity that is almost crumbling under the weight of loans that may never be recovered. This unfortunate coupling has now been largely eroded, believes Nilanjan KarfaExecutive Director, Banking & Finance – Equity Research, India, Global Markets, nomura.

“The asset quality issues therefore seem to be largely resolved, as well as any issues that may have been encountered with the loans we have made in the past,” Karfa said in an interview with ETMarkets.com.

According to the latest data released by the Reserve Bank of India, the gross ratio of non-performing assets of commercial banks fell to 7.3% at the end of March 2021, then to 6.9% at the end of September 2021, from 8.2% at the end of March. 2021. March 2020. Edited excerpts:

The budget envisaged some push for digitalization and most analysts seem optimistic about the banking sector. With two years of the pandemic behind us, do you think we are now on a better streak when it comes to asset quality issues? What is your view of banking stocks?
A couple of things work when someone is bullish on the banking sector or BFSI.

One is the relative underperformance of last year. So if the money is to move out of the overvalued or highly valued consumer sector, the internet sector and stay in India, it is entirely possible that on a relative basis the banking sector will do better.

It’s more on the technical side. On a fundamental side, a couple of things work.

Banks are probably the best capitalized in the last 20 years. There should be a broad appetite for growth, provided there is the right kind of demand. While the offer looks pretty good; demand side is a bit of a question mark.

Secondly, if you look at the issues of the last 10 years – around 2018, 2019 these suddenly erupted again with the NBFC crisis and then afterwards with the emergence of Covid – basically the whole size range of notes, from large enterprises to medium enterprises to even small loans to individual loans have been strained.

There will still be a few pockets here and there, but what we have just witnessed over the past 10 years is a complete sweep of leverage across all possible segments of the economy. While there may be pockets here and there, restructurings that have happened, warranty systems (some of which will fail), we’re probably not going to look back on what we’ve witnessed over the past three years. and certainly not in the last six-seven years.

The asset quality issues therefore seem to have been largely resolved, as well as the problems encountered with the loans we have granted in the past. But what will probably matter most is what will generate revenue. This is where there is a bit of debate. It seems to me that a large part of the market is much more optimistic than me. Am I personally super optimistic? The answer is no, but I’m reasonably optimistic.

So will demand come back quickly? It seems a bit unlikely! There has been a significant loss of income in the most important segments of the economy.

Imagine it as a steam engine. If you remember how a steam engine works – for all the wheels to start working in tandem, it takes a little time. There will therefore be wheels which start and then slip without the locomotive moving; the same for the economy, there are different cycles, different ecosystems, interconnections between them. For all to start working again, it will take some time.

How long is hard to say, but we’re on that curve right now. Unless something dramatically worrying comes back on the health front, people will go back to work, to commerce; people need money to survive and it will come back. People will come back and look for revenue generating opportunities which will in turn result in more loans and more fees for banks to start generating revenue. Revenue minus expenses, i.e. operating profit. A reasonable upward swing is possible over the next couple of years.

The combination of larger-than-expected fiscal and government borrowing deficits and tighter oil prices pushed sovereign bond yields higher in the current quarter, although a dovish RBI cushioned the blow to some extent. In terms of mark-to-market impact on cash books, how will banks handle the situation?
There is no navigation; it is a blow that will have to be taken. So to some extent there are conflicting interests.

If you look at the system, on one side there is a government that will have to borrow, mostly in longer-term treasuries and the entities that will subscribe to them; much of it is made up of banks, so banks will have to underwrite higher title deeds.

Higher mandate paper in a rising rate cycle obviously means there will be losses on the existing portfolio. So might as well live with it, but there are counterweights.

For PSU banks, the rise in yields is more relevant than for private sector banks and not least also because the duration of the books for PSU banks is much greater. It is higher than that of private sector banks, and so PSU banks tend to take a bit of their treasury income when rates rise. But on the other hand, there are factors that benefit them on the opex line.

Net-net there is always a negative but the markets tend to ignore it because while a lot of these books are usually held over their lifetime there may be a loss in notional time value but there is has no possible loss. So when markets turn to banks, they typically remove that volatility and then look at core operating income. So as long as this holds, it shouldn’t be a problem unless we see a very strong uptick which is unpredictable.

Let’s come to the situation on the credit drawdown; the loan-to-deposit ratio is still close to a historic low. What is your outlook and what might be your estimate of loan growth for the full year ahead?
It looks like we’re really on the road to recovery, and then if you break down the overall incremental growth or the reasons for the decline, over the last year and a half, the biggest drag actually comes from the large manufacturing sector and in that commodities to such an extent that what used to contribute about 1.5-2% to incremental growth is actually on some kind of minus 2% contribution right now.

I think over the last four quarters, steel companies have reduced their debt by probably Rs two lakh crore (2 trillion). It’s not a small number. My own feeling is that if we manage to do around 8-8.5% odd this year – we’re probably already running around 8.2% at the last date and hopefully if we can get closer to 8.5% – so looking at how much we lost in retail last year, the services segment a bit more and if we break away from that; going from 8.5% to 11% shouldn’t be a big challenge.

Does the market expect it? Maybe not. The markets are probably looking at 10-10.5%. My own expectation is probably 11-11.5%. You might say I’m a little more optimistic.

One of the key themes in the banking space for some time has been corporate governance issues. How is the industry evolving in terms of regulatory spotlight on corporate governance?
It works on both sides. There is a lot of red ink that has gone through because of the multiple failures and I want to be a little careful when I say this, but someone is at fault.

RBI – given what has happened over the past four or so years – is bound to take action and when regulators act, they don’t act with a scalpel. They work with an axe. And I think that’s what happened. What probably helped is that it’s like at low tide you can tell who’s swimming naked. And if there is no growth, two things are possible because if there is no growth; banks, NBFCs, according to which ones have problems, are very easily visible.

Secondly, the type of audits that RBI will have to perform are also less. So it’s probably getting a little easier for RBI to figure out and considering what happened, they’ve been a little stricter as well. Again, let me not judge whether RBI is right or wrong. It’s a regulator.

What is your vision of the NBFC sector? In terms of the restructuring that was done in the first two waves of COVID, what impact would that have?
Everything is already in the price and if you look at the share prices of these NBFCs, many are below the book.

It is more or less well known and if we look at what RBI asks of NBFCs and especially all lending institutions i.e. 90 day NPL recognition and no settlement until all delays are paid, everything is in front of you.

Even an HDFC Limited had NPAs around 30 basis points higher; a Shriram Transport will probably have 78 or 80 bps, someone else will have something else. It is therefore well ahead of us. Yes, there will be restructuring and there has been restructuring. Whether it’s an NBFC or a bank, we should expect 15-20% of that to become delinquent. There won’t be too much of a difference. Basically, it all came to the surface.

One way or another, everyone has a clue. It’s a cycle we’ve been living in for a decade. The problems are therefore well known. Growth is the key factor. If growth returns, many of these issues will be hidden or probably much more easily managed.

What are the best positioned and most fragile sectors in terms of the overall quality of the banking system’s assets?
I want to avoid taking individual names. But let me talk about sectors. Banks are ultimately tied to how other sectors are doing.

So where the revenue-generating action has left off is the segment that is most affected. To this extent, the entire service sector, a large part of the commercial tourist vehicles (buses), everything related to travel and tourism, temple tourism, microfinance.

Without forgetting that if there is no growth, the entire SME sector will be put to the test. I therefore neglect none of these.

These are the real challenges we have to face. If, for example, the GDP projections are not met and the real consumption cycle even slows down from here, then we have a problem. It is an unavoidable problem. Is it currently in the price? Probably not.

Even though the banking sector underperformed last year, I always say the market is a little more bullish than what banks and NBFCs are right now because everyone thinks it’s going to come back to the normal. I am also in a similar camp. If this does not happen, there will be downside risks. As a house, Nomura is actually a bit negative on overall GDP growth and we expect higher inflation and higher policy rates.

What a credit rating downgrade does is that it leads to the denial of future credits or the imposition of interest rates that are much higher than market rates. So what can a customer do in such a situation? We explain the options that are available to rectify the credit score.

How can one get their credit score fixed?

A customer can check their credit score and whether a loan (which has not been taken out) is outstanding through reports provided by the respective credit bureaus. These reports can be obtained by connecting to CIBIL, Equifax or Experian, or via net banking.

Experts say that the easiest way to fix the credit rating would be through an institutional process initiated by the Reserve Bank of India (RBI). Data subjects can also approach the information provider and offices directly, although this is usually a cumbersome process.

“This rectification process should be case specific…if a CIBIL score has been misrepresented, the client should contact the specific institution where their security was compromised. The lender, who is also the information provider, will need to approach CIBIL to regularize the client’s rating. In addition, aggrieved parties will also have to contact CIBIL and initiate a dispute request, either online or by writing to them,” said Surya Bhatia, certified financial planner.

A simpler way suggested by financial experts is to ask the RBI to step in and provide relief to aggrieved customers as many people have been affected recently.

“The easiest and most transparent way is for credit institutions to correct them with credit bureaus. As thousands of customers have been affected by such scams, the RBI may order specific institutions to put in place a process to address this issue,” said Srinath Sridharan, Business Advisor and Independent Markets Commentator.

“If individuals have to do this, it will be a painful process and they will have to provide a lot of documentation. The ombudsman can also be approached if one does not receive a satisfactory response from the lender. The burden of proving this should be on the institution, not the individual,” he added. If the issue is still unresolved, customers should contact the RBI through its mediation program.

Where to go if the problem is still not solved?

The Reserve Bank of India has launched the Integrated Ombudsman Scheme which provides solutions to customer complaints such as deficient service from banks, NBFCs and payment system operators.

The program enables nearly 44 crore loan accounts and 220 crore deposit accounts to file any grievance with the RBI through an online portal. It offers a single interface for customers to file complaints, submit documents and track the status of their issues.

A centralized reception and processing center has been set up at RBI Chandigarh for the reception and initial handling of physical and email complaints in all languages. The scheme integrated RBI’s three existing ombudsman schemes – the Banking Ombudsman Scheme, 2006, the Non-Banking Financial Companies Ombudsman Scheme, 2018 and the Digital Transactions Ombudsman Scheme, 2019.

How do I file a complaint with the Ombudsman?

Since loan providers are mainly banks, NBFCs or payment service providers, most complaints will be covered by this scheme. Here’s how to contact the ombudsman:

• Complaints can be filed online at https://cms.rbi.org.in.
• Complaints can also be lodged through the dedicated email at [email protected] or sent in physical mode to the Centralized Receipt and Processing Center (CRPC) set up at the Reserve Bank of India, 4th Floor, Sector 17, Chandigarh – 160017.
• A contact center with a toll-free number (14448) manned by RBI staff members operates to provide assistance to customers in filing complaints and providing information. This center operates from 9:30 a.m. to 5:15 p.m. and is available in Hindi, English and eight regional languages.

Electronic and physical complaints received at the CRPC are recorded on the CMS (Complaints Management System) by the staff after obtaining additional information, if necessary, from the client.

Has India seen an increase in such complaints?

The RBI witnessed a 22.27% increase in the volume of complaints under various mediation schemes between April 2020 and March 2021. Complaints related to ATMs and debit cards, banking mobile phones and credit cards represent the bulk: 42.74% of the total number of complaints. against 44.65% the previous year. There were 60,203 complaints about ATMs and debit cards, and 40,721 about credit cards.

The volume of claims amounted to 4,04,143 over the period at an annualized rate. Chandigarh, Kanpur and Delhi received the maximum number of complaints, according to the latest data from RBI.

The number of complaints received against NBFCs and digital transactions stood at 8.89% and 0.98%, respectively. The overall kill rate improved to 96.59% from 92.52% in 2021, despite higher volume. This was achieved through the end-to-end digitization of the complaints handling flow in the CMS.

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Soaring gasoline prices are stoking inflation and causing headaches for governments and central banks around the world. In countries where elections are approaching, they are an additional headwind for incumbents.

While the midterm elections in the United States in November are the best example of the influence of fuel prices on the political sphere, the upcoming votes in Asia could also be affected. Voting is already underway in Indian state elections and South Korea is holding a presidential poll in early March. There are also Australian general elections and a contest for the upper house in Japan in the coming months.

Oil’s relentless march to triple digits has already prompted political action from incumbents. India cut retail sales taxes on petrol and diesel in November and there has been an unofficial price freeze since. South Korea imposed a temporary 20% cut in fuel taxes from October to April, which could be extended, while Japan subsidizes refiners to make fuel.

According to Sonal Varma, chief economist for India and Asia ex-Japan at Nomura Holdings Inc., governments in economies where wage levels lag behind inflation are the most vulnerable to an induced policy reaction. by gasoline.

“If a country has low-income growth and high inflation, then that becomes a double whammy, and then that could have both economic and political repercussions,” she said. This is of particular concern in Asia, given that all major economies in the region are net importers of oil, Varma said.

Australian retail gasoline is up 80% since early May 2020, while in Japan it has risen 37% as oil recovers from the depths of the pandemic. In India, major state-owned fuel retailers are expected to raise prices sharply after elections ending next month.

Voters there head to the polls in elections that run until early March in five states, including Uttar Pradesh, the largest state with more than 200 million people. Inflation, which breached the central bank’s 6% tolerance limit in January, signals a tough challenge for Prime Minister Narendra Modi’s Bharatiya Janata Party. Rural wages have not kept pace, rising just 3.31% in December from a year earlier, according to data from Bloomberg Economics.

South Korea elects a new president on March 9. Incumbent President Moon Jae-In is barred from seeking re-election, and polls indicate a tight race between his party and opposition candidates. Average wages rose 4% last year, while year-on-year inflation was 3.6% in January, so price gains may not play as big a role in the vote as elsewhere.

Australian Prime Minister Scott Morrison is due to call a general election before the end of May and polls show he could face a crushing loss. Consumer confidence has taken a hit as households battle soaring petrol prices, with the Reserve Bank of Australia forecasting core inflation to top 3%. Average salary levels increased by 2.2% in the third quarter of 2021 compared to the previous year, according to data from the statistics office.

In Japan, more than half of the seats in the upper house are up for grabs in a vote in July, which could affect Prime Minister Fumio Kishida’s chances of staying in office. Inflation expectations among households are at their highest since 2008, while average monthly cash incomes fell slightly in December from a year earlier. Kishida said on Thursday that other policies aimed at mitigating the effect of high oil prices on households were being discussed.

The growing political focus on trying to lower oil prices represents a move away from commitments made at the COP26 meeting late last year to accelerate efforts to phase out fossil fuel consumption. Rising oil prices are swelling the coffers – and influence – of Saudi Arabia and Russia, and reinvigorating an industry that was moving toward cleaner energy sources.

“High fuel prices have been a persistent issue in the global inflationary environment since 2021,” said Vandana Hari, founder of Vanda Insights, an oil market analysis provider in Singapore. “Of all categories of consumer goods, fuel prices are a particularly politically sensitive issue.”

Finance companies have applied for priority sector lender status for money they receive from banks to provide loans for the purchase of two-wheelers (TWs). This would help them get cheaper funds from banks and increase lending, especially in rural areas, according to the Financial Industry Development Council (FIDC).

The industry lobby group said in a plea to the Reserve Bank of India that two-wheelers play a crucial role in the rural economy as they help improve living standards and enable convenient and safer travel at an affordable price. They also help to increase income.

“In view of the value and use, we ask the respected authority to consider financial assistance for the purchase of two-wheelers in the rural economy as a priority sector loan, as this will allow lenders to provide funds in a timely manner at a cheaper cost,” the FIDC said.

The priority sector refers to the sectors that the government and the RBI deem important for the development of the basic needs of the country and which should be prioritized over other sectors. Banks have a mandate to encourage the growth of these sectors with adequate and timely credit, he said.

The use of two-wheelers in the rural economy is not limited to self-driving but also to the transport and delivery of milk, vegetables and other common goods.

The penetration of two-wheelers is lower in India than in other developing countries. For every 1,000 people, only 102 people own a two-wheeler in India, compared to 166 in Malaysia, 281 in Indonesia and 291 in Thailand.

India’s rural market has a strong consumer base of about 740 million people, of which about 30 percent only own two-wheelers in the rural segment, the FIDC added.

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New Delhi: Indian stock markets have been very volatile over the past two weeks. On Tuesday, the benchmark, Sensex, showed strong swings. It opened at 57,621 and moved to 57,925. Later, Sensex fell to 57,058, later repeating the cycle of highs and lows throughout the day. As of 3 p.m., the index was trading at 57,523, about 100 points lower than the opening high.Read also – Share Market Today: 20 stocks for a profitable trade on February 8

Nifty50 has also been very volatile. After peaking at 17,536 on Tuesday, it fell to 17,119. As of 3 p.m., the index was trading at 17,220, about 300 points below the opening level. Real estate and banking stocks were weak performers. Read also – Adani Wilmar IPO today. Direct link to check the stock price here

But what explains the volatility of India’s stock markets. Let’s take a look. Read also – Monday Blues: Sensex closes more than 1,000 points lower, Nifty just over 17,200

Sale by foreign investors

Foreign investors are an important part of Indian markets. On Monday, the United States published its employment report. The report was quite positive. After the report, according to Economic Times, there is a good chance that the Federal Reserve, the central bank of the United States, will raise interest rates to control inflation.

This rise in rates will cause bond yields to rise and investors prefer bonds to markets from a safety perspective. This played a major role in Indian stock markets acting more volatile than usual.

Monetary Policy Committee meeting

The Reserve Bank of India (RBI) is holding its monetary policy meeting between February 8 and 10. The outcome of the meeting will be announced on Thursday 10 February. Investors fear that the RBI will raise policy rates, which will send money out of the stock markets into the banks.

Rate hikes are likely to control the rate of inflation. In addition, central banks around the world plan to adopt tighter monetary policy to limit the soaring budget deficit due to pandemic support programs.

This too has played a major role in weakening the minds of investors.

Rise in oil prices

In just a few weeks, crude oil prices have gone from $65 a barrel to $93 a barrel. According to the media, this is due to rising geopolitical tensions across the world.

Russia, which is the world’s second largest oil supplier, is very close to an armed conflict with its neighbor Ukraine. On the other hand, in the Middle East, Houthi rebels in Yemen and the United Arab Emirates are constantly exchanging fire.

With supply sources so stressed, oil prices are rising. This put additional pressure on central banks to adopt a hawkish stance, leading to volatility in the markets.

If reports are to be believed, market volatility will continue for a few more days.